Reply to the Daily Bell: Gold porn, lies, and misrepresentations

The Daily Bell appears to be quite obsessed with both Memehunter and Real Currencies, having exhibited a painful compulsion to refer indirectly but unmistakably to their past discussions with both of us in a series of articles, even though we have mostly left them alone for the last six months (in fact, Memehunter took a well-deserved break after the Daily Bell shut down its comment section).

However, these recent articles contain such blatant distortions that we deemed it necessary to attempt to rectify the situation. Furthermore, it is apparent that the elves over at the Bell cannot wait to debate again with us. It is our sincere hope that, by creating the Daily Knell, a blog dedicated to exposing libertarian lies, we have finally fulfilled their wish.

Although it is true that Alfred Orage, the editor of the New Age, promoted C. H. Douglas’ Social Credit, we learn from Wikipedia that “in an effort to discredit the Social Credit movement, one leading Fabian, Sidney Webb, is said to have declared that he didn’t care whether Douglas was technically correct or not – they simply did not like his policy” and that the British Labour Party resisted pressures to implement social credit, due to incompatibilities with “hierarchical views of Fabian Socialism”.

That does not sound like a ringing endorsement. It is also fairly obvious to anyone vaguely familiar with Social Credit that, partially flawed as this economic philosophy may be, it is most certainly not favorable to Money Power.

“Already in 1926, Ludwig von Mises’s first tour in the United States was paid by the Rockefeller Foundation. The National Bureau of Economic Research, which supported Mises in the 1940s, was also heavily sponsored by the Rockefeller Foundation. Mises’s salary in New York was paid by Lawrence Fertig, Kohlberg’s colleague at the AJLAC [American Jewish League against Communism], and by the Volker Fund.”

In fact, as this chart suggests, Mises was very much at the center of an entire network connecting Libertarian think-tanks and foundations all the way to the top of Money Power.

Among other falsehoods propagated by the Daily Bell are the following:

– The annoying tendency to equate any non-commodity based currency with “governmental coercion”. Many alternative currencies, such as the Gelre or the Chiemgauer, are not based on governmental coercion and are not sponsored by the UN or UNESCO. Clearly, the Bell has a vested agenda in trying to equate any paper or digital currency with some kind of coercion, and in promoting the idea that the means of exchange should be commodity-based, an idea which is actually detrimental to free trade. Maybe this has to do with its partnership with a gold mining company?

– The tendency to lump together Stephen Zarlenga, Ellen Brown, and “a number of blogs attacking Austrian-based free-market economics”. In contrast with Real Currencies and the Daily Knell, Ellen Brown does not consider interest to be a problem. Although it is a step in the right direction to have government earn the interest rather than a private banking cartel, interest-free currencies would be a much better option. Moreover, Brown’s scheme is associated with severe power centralization, which we do not favor.

– Contrary to the Bell’s repeated assertions, we are not saying that interest should be banned. By offering interest-free mutual credit, people will naturally prefer to borrow in an interest-free currency rather than in an interest-bearing one. There is no need, in fact, for “coercion” of any kind. Memehunter frequently made this point on the Daily Bell (in the feedbacks), so we have to suspect that this is pure “sophistry” on the part of the elves.

– The claim that “Money Power does not care whether its control is exercised publicly or privately”. Although it is obvious that governments all over the world have been corrupted, and that politicians “can be controlled and bought”, the fact remains that, in principle, a public institution is accountable and should represent the interests of a nation, whereas there is no such obligation on a private institution. This is exactly why Money Power has worked hard to undermine the institution of government, and to progressively replace nations by larger economic blocs led by unelected technocrats instead of elected politicians, as is the case with the European Union.

Annunaki and Austrian “gold porn”

Moreover, the Daily Bell, together with other Austrian outlets, propagates various spurious economic ideas and myths which deserve to be exposed. For instance, this paragraph:

“People are free to find mines and dig up their own gold and silver. Drives the elites crazy. That’s why the elites are constantly trying to ban and confiscate honest money. The elites hate the free circulation of money metals.“

Of course, people can dig up their own gold and silver. But what good is that for? Will the world be a better place because everyone is busy mining gold and silver? Last we heard, Zecharia Sitchin and his theories had been debunked, but maybe some hardcore Libertarian goldbugs cling to the idea that humans were genetically engineered by the Annunaki to mine gold in South Africa…

In fact, this famous scene may be the ultimate fantasy of Austrian sympathizers favoring a return to an interest-bearing gold-backed currency:

“You see in this world there’s two kinds of people, my friend. Those who loan gold, and those who dig. You dig.”

More seriously, we must remember that the means of exchange is basically credit, a record of an unpaid debt. There is no valid reason why the amount of credit available to a community should be limited by the amount of a scarce commodity. The Daily Bell unfailingly criticizes any monetary scheme involving some sort of human supervision with the oft-repeated argument that “no one can know how much money is enough”, but cannot justify why having the money supply tethered to the quantity of gold or silver available is in any way a guarantee that the money supply will be “monitored” more adequately and will correspond to the needs of a community.

Furthermore, whereas physical gold may be in some sense more “honest” than paper currency because it cannot be inflated so easily, it is debatable whether private gold-backed currencies are in any way more honest than paper or digital currency. Blogger FOFOA has explained this at length in “The Return to Honest Money”.

But the larger issue is that, although it may be an excellent store of value, physical gold is not well-suited as a means of exchange because of its scarcity. However, the Bell seems unable to distinguish between both monetary functions and refuses to understand why it is advisable to use different media for both, as brilliantly demonstrated once again by FOFOA.

The fact that the UN does seem to have started to promote LETS lately is obviously an attempt to co-opt it and thus is a source of concern. Why would the UN do so? LETS has suffered from two major drawbacks, keeping it from really threatening Money Power domination. The first is that it uses a working man’s hour as a unit of account. As a result, nobody knows what 1 LETS is really worth. Therefore businesses have been hesitant to accept LETS units.

Secondly, LET Systems have been managed by amateur community organizers, who have proven themselves incapable of organizing local trade in a way that transcends the level of the most primitive service exchanges between individuals. By promoting LETS as a viable ‘complementary currency’, it’s likely that the UN has willingly promoted a non-threatening ‘alternative’. In no way has the UN been shown to promote, help develop or even investigate what is necessary to threaten the Money Power monopoly on currencies worldwide.

The Daily Bell in its discussions with both Memehunter and Real Currencies, but also with people like Ellen Brown, has resorted to misrepresentation and downplaying of valid points. Already in the early stages of the discussion, we pointed out that it was quite obvious that if government creates a monopoly, it is much worse to have it hand that monopoly over to a private banking cartel than to have Government use it to print its own interest-free currency. Notwithstanding the fact that such a monopoly is uncalled for, this simple transfer would save the taxpayer 450 billion per year. All this interest now ends up with wealthy “Anglosphere power-elite” bankers and foreign creditors and thus in no way serves the real economy.

Additionally, the Daily Bell did everything it could to downplay the interest issue. The elves ignored the fact that it’s a massive wealth transfer from poor to rich, to the tune of 5 to 10 trillion per year globally. They also tried to explain it away as irrelevant to the issue of manipulation of volume, which is not only untrue (interest does affect the volume issue, as ever more money is required to pay ever more interest, thus leading to an eternally growing money supply, a situation which is obviously terminally unstable), but also clearly is just a trick to get the issue off the table.

And lastly, how can it be that the swashbuckling elves of the Bell ridiculously need a politician like Ron Paul to implement their vaunted free market? How can it be that this man has been promoting the same crap for 40 years? Is that consistency or an acute disability to learn? Or is it perhaps a party line that had to be toed? Why do the elves need “violent statist coercion” to get what they want, while people all over the world are creating regional currencies based on agreement and not coercion?

We know the answer: Gold will not work as an everyday means of exchange in a truly free market. Ron Paul and the Daily Bell, through their Agora connection, are part of a large network parading as a grassroots movement. They both represent Gold interests and need state coercion to get their specie accepted for tax payments and thus get an unfair and almost decisive advantage in the ‘free market’ for currencies.

Nothing new under the sun… Just some more Money Power special interest groups trying to manipulate the debate and buy votes in Washington.

DB uses the partial hangout method in deception. It is a machine churning out propaganda at the cutting edge. It seems to be extremely well funded and well informed about the moves of the parasitic deletes. If you can read inbetween the lines and ignore the deception it is an interesting website and is informative about what the parasitic deletes are thinking.

To be fair, the leading Fabians, including Sidney Webb, were whole-hog on Georgism.

I’d call social credit better than Georgism, but worse than “Lincoln-ism”, which would still have been in the living memory of many Americans and Europeans in the 1920s. Georgism was a direct attack on Lincoln. Social Credit may have been an “organic” phenomena but was embraced and promoted by certain Fabians because it soaked up a lot of well-meaning socialists, and thus divided and weakened political resistance to liberalism (aka “The New World Order” as later termed by Fabian HG Wells).

Keep in mind that one of Woodrow Wilson’s main ignonimies (aside from the Federal Reserve System) was to lower US tariffs (from ~18 to 8%, halving the contribution of tariffs to the federal budget from 44-20%). I’m not as familiar with the relevant situations in Europe, but I believe Germany followed the same basic pattern.

In this environment, the obvious political solutions (those of Lincoln, Bismarck and others in the previous generation) were protectionism, national banking and public works. Instead you get 33 varieties of socialism.

Social credit, despite some positive features and findings on the part of CH Douglas, at its core has two fatal flaws:

1. Malthusianism – the assumption that technology and growth automatically render labor useless.
2. Libertarianism – the idea that we can produce a consumer-led economy by handing out cash.

The point of the article you linked to, which I’d still stand by, is that there is only one practical program to oppose imperialism, which is the “American System”. Social Credit sounds better than what we have today, and certainly better than what the Daily Bell advocates, which is the economic equivalent of “The Hunger Games.” But to an informed observer in the 1920s, it would have sounded like New Age claptrap that took fire away from a practical, proven system.

Hi Deadeye,
this is the key
that there is only one practical program to oppose imperialism, which is the “American System”.

I can understand where you’re coming from, as the ‘American System’ seems to oppose ‘British’ Imperialism in the US. However, it also created the US Behemoth with a particularly nasty Empire of its own.

I agree with you that ‘free trade’ is nonsense and favors Big Business and not the nations. However, that basically has little to do with Social Credit. I don’t think Douglas had anything substantial to say about tariffs.

Also: the problem with ‘schools of though’, be georgism, Social Credit, or even Lincolnism is that they all have something, they all have problems and none of them is comprehensive.

So I think the challenge is not to say this or that school, but to identify the different aspects and put them together in new systems.

For instance, you seem to oppose Georgism because he rejected tariffs (correct me if I’m wrong), but his land reform propositions do seem to hold water.

Same with Social credit: Usury is most of the gap and ending interest would make most of the money printing superfluous. Also: it does not end the wealth transfer to the ultra rich, which Interest really is. Last: I agree with your ‘malthusian’ analysis. I do think Douglas was right in pointing out that in the current order we are faced with billions of useless eaters, but the problem is that all the technological advances have been monopolized with the ‘intellectual property’ hoax. End that, end scarce money and the Money Power cartel owning all transnationals would be faced with very stiff grassroots competition. In fact: it’s cartel would be useless overnight because nobody is going to use oil, pharmaceuticals, GMO’s etc if the real deal becomes available.

But back to the main thing: I think it’s wrong to say Lincoln resisted Empire. He just created one of his own. And it’s not the american people that benefit from it either. Sure, in the earlier days, when the Money Power was building up the US, people knew good times. But the US was built to conquer the world and now that it has done its job it is being readied to be put back into place.

I would reject the idea that the American System created the “American Empire”. Quite the contrary. Indeed, America’s military post WW2 has been the club wielded by international banks. But Lincoln and FDR both made major strides to bring the developing world toward the first world, as opposed to extracting their resources.

As in Lincoln’s time, the world can function with multiple poles (centers of gravity) represented by protectionist nation-states. This is basically what Putin, Ahmadinejad, Chavez, et al are constantly calling for. Today, that might consist of the US, China, Japan+Australia, Russia, the EU (led by Germany), maybe India and South America. The US needs mineral ores from Africa and South America. Africa needs technology, education and capital equipment. So we can find a balance of trade, preferably in cooperation with China, Russia, and others to avoid a cold war over resources. The goal would be to push Africa toward the first world so they can trade on more equal footing.

A country like the US doesn’t “need” slave labor to produce iPads. This is a business decision by Apple. If we have tariffs, Apple’s factories will move to California, people will pay 20% more for their iPads, and have 20% more income to account for it.

On social credit…

In theory, I think Douglas addressed the same issue as “the American System” – there is a lack of purchasing power relative to the thermodynamic needs of the population. But where he solves the problem by distributing coupons, the AS solves it by increasing production.

Example: I live in Illinois. Let’s say we need to rebuild most of the water and sewer systems, at a total cost of $100 billion. A state can’t possibly raise enough tax revenue for this to happen, so it doesn’t get done. What an “American System”/Hamiltonian national bank would do is the following: Buy a $100 billion bond (IOU) from Illinois, with 0% interest and a 100 year maturity. Now instead of owing $100 billion today, or borrowing from JP Morgan, Illinois owes $1 billion per year over 100 years. This massive project will inject $100B in new circulating credit that will end up as payrolls and corporate profits, all of which are taxable.

This does increase the national debt by $100b, but that debt is a mirror of credit earmarked for physical production, and liquidated by tax revenue. This is what Alexander Hamilton meant by “~national debt, if not excessive, is a blessing”. If it’s lent specifically for production, debt indicates work is being done.

What does Douglas do? Hands out cash. This will help certain parts of the economy (ie the automobile industry, food, home ownership, etc.), but how could this possibly ever rebuild $100b in infrastructure? What might be useful about social credit theory is that “the gap” tells us something about the level of production and purchasing power in the economy. “If not excessive” needs to be measured against price parity, employment, production & consumption of goods, etc.

As for usury, this can be limited by creating categories for national bank lending – 0% loans for infrastructure and essential production (ie opening a steel mill or textile factory), 1% loans to commercial banks and credit unions for making mortgage loans, lending to small business, etc. Then the banks can lend to homeowners at 1.25%, and cover their costs of doing business. This is not usury so much as an insurance policy against a certain number of loans defaulting.

Anthony, I think our goals and our view of international banks is identical. But I think debt is an essential feature of the system, and there has to be a role for modestly-sized commercial banks (maybe anything below LIBOR). I’m working on an ambitious website right now with some folks in the US, which will represent this position in more detail. I hope we’ll be able to stay in touch and work together on some of these issues.

Yes, we’re pretty close on many issues, no doubt. I’m just a little less enthusiastic about strong Government. Especially in such a massive country as the US, where strong powercentralization really threatens both state rights and the neighbors (or the rest of the world).
But in many respects what you suggest is entirely rational.

I’m really looking forward to the new website! I knew you were working on it and had been intending to ask about it. Good to hear you are making headway!

“No man is an island, entire of itself; every man is a piece of the continent, a part of the main… Any man’s death diminishes me, because I am involved in mankind, and therefore never send to know for whom the bell tolls; it tolls for thee.”

- John Donne (1572-1631), Meditation XVII

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